An­glo loan details were kept ‘tight’, trial hears

Irish Daily Mail - - Life - By He­len Bruce

‘Reg­u­la­tor is say­ing “I’m not look­ing”’

DETAILS of back-to-back loans be­tween An­glo Irish Bank and Irish Life & Per­ma­nent were to be kept ‘tight as a duck’s a***’ – but the fi­nan­cial reg­u­la­tor would not be look­ing, the trial of David Drumm heard yes­ter­day. The com­ments were made dur­ing phone calls in­volv­ing An­glo and IL&P staff, record­ings of which were played for the jury yes­ter­day.

The for­mer An­glo chief, Mr Drumm 51, from Sk­er­ries, is ac­cused of false ac­count­ing and con­spir­acy to de­fraud. The charges re­late to what the prose­cu­tion de­scribes as a ‘wholly ar­ti­fi­cial’ €7.2bil­lion trans­ac­tion be­tween An­glo and Irish Life and Per­ma­nent (IL&P), which was al­legedly de­signed to cre­ate the il­lu­sion that An­glo was bring­ing in bil­lions of euro at a time of global fi­nan­cial cri­sis.

Mr Drumm has ad­mit­ted au­tho­ris­ing the deal, but de­nies that he acted fraud­u­lently or dis­hon­estly.

In his sec­ond day in the wit­ness box, Matt Cullen, for­merly a di­rec­tor in An­glo’s trea­sury depart­ment, was taken through a num­ber of phone calls, which had been recorded as part of the bank’s pol­icy to track deals.

The calls ini­tially re­lated to a €750mil­lion deal done in March 2008, which pre­ceded the Septem­ber 2008 trans­ac­tions for which Mr Drumm has been charged.

The jury heard Mr Cullen was asked dur­ing a con­fer­ence call on March 25, 2008, to up­date other An­glo ex­ec­u­tives about the ‘Permo’ deal. Dur­ing that con­ver­sa­tion, Mr Cullen said the deal was on, and that An­glo would give money to IL&P, who would give it back as if it came from Irish Life As­sur­ance, so it would ap­pear to be a cor­po­rate de­posit for An­glo.

John Bowe, then An­glo’s head of cap­i­tal mar­kets, is recorded as say­ing: ‘Only is­sue we got to think about is from a reg­u­la­tor point of view, and the reg­u­la­tor is more or less... say­ing “I’m not look­ing”.’

In an­other call on March 27, the jury heard that Mr Cullen and his coun­ter­part in IL&P, David Gantly, dis­cussed the details of the March trans­ac­tions. Mr Bowe was also on this call. Mr Gantly told Mr Cullen: ‘You put the stuff into us and we put it straight back through our other boys.’ ‘That’s it,’ Mr Cullen replied. The court has heard that ‘the other boys’ re­ferred to Irish Life As­sur­ance. Mr Gantly sug­gested it would be better to break the €750mil­lion fig­ure into smaller trans­ac­tions be­cause ‘it might look better to dis­guise it, some­what, you know?’

He also sug­gested that the deal should be kept ‘as tight as a duck’s a***’. Pros­e­cut­ing coun­sel Paul O’Hig­gins asked Mr Cullen what Mr Gantly might have meant by these state­ments.

Mr Cullen replied: ‘He was afraid it would get out into the mar­ket.’

In a phone call in Septem­ber 2008, Mr Bowe told Mr Cullen that the bank’s ex­pec­ta­tions were very neg­a­tive for the year-end ac­counts later that month, the jury heard.

Mr Cullen told Mr Bowe that he had spo­ken to Dave Gantly, and had told him the fig­ure for the Septem­ber in­ter­bank loans could now be higher than the pre­vi­ously agreed €3bil­lion. Mr Cullen told Mr Bowe: ‘Be­cause, as they see it, you might as well be hung for a sheep as a lamb’.

The trial re­sumes to­day.

Trial: David Drumm yes­ter­day

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